Final answer:
A fiduciary is subject to account objectives, governing instrument requirements, and prudent investment statutes, but not necessarily to profit maximization, as this could conflict with the duty of prudent risk management.
Step-by-step explanation:
The question asks which of the following constraints a fiduciary is not subject to when managing account assets: a) Account objectives, b) Profit maximization, c) Governing instrument requirements, or d) Prudent investment statutes. When serving as a fiduciary, one is obligated to act in the best interest of the client or beneficiary, adhering strictly to specific responsibilities and standards.
Firstly, a fiduciary is definitely subject to account objectives which outline the goals and investment strategies of the account. These objectives are agreed upon with the client and the fiduciary is bound to strive to meet them. Next, governing instrument requirements, such as trust documents or the terms of a will, are legally binding directives that a fiduciary must follow. Similarly, prudent investment statutes are state laws that provide guidelines for making financial decisions in a thoughtful, well-informed manner, placing emphasis on the process over individual investment performance.
Profit maximization, while often a natural aim of investment management, is not a fiduciary constraint like the others. The duty of a fiduciary is to manage the investments under their care with diligence and prudence, which might not always align with maximizing profits, especially if the level of risk required to do so would be inconsistent with the client's risk tolerance or the governing documents. Hence, the answer is b) Profit maximization.